Posts Tagged ‘Barrick Gold’

In contrast to more volatile stock market investments, gold has always been valued as a solid and dependable means to protect wealth. There are plenty of reasons to be optimistic about the gold mining industry for both the short term and long term. Herein, we have discussed what investors in the gold mining sector can look forward to in the coming months and years.

According to the Bloomberg Intelligence team, the Fed could be “one and done” in 2017 when it comes to rate hikes. Gold’s top forecaster for the last quarter, Intesa Sanpaola SpA, says that the metal’s price could hit $1,350 by year end, citing faster inflation and geopolitical tensions. “Gold will likely stay elevated given safe haven demand,” Barnabas Gan, economist at OCBC, said.

China has become a debt crisis waiting to happen. Central banks in Europe have deployed negative interest rates that rapidly erode value. And in the United States wealth has been borrowed from future economic growth to feed bubbles in stocks and real estate. That’s why billionaires are rapidly rushing into their old standby, gold. It’s the only asset that can be trusted right now.

Gold futures closed Thursday at 1,219.4, up 5.9% year to date and 8.5% above the post-election low of 1,124.3, set on Dec. 15. The price of gold has traded up and down since the election. Comex gold has been less volatile than gold mining stocks and the gold stock exchange-traded fund. Here’s how to trade gold stocks using weekly charts and key trading levels.

Traditionally, gold has been a so-called safe haven for investors worldwide. The intrinsic value of physical gold will remain even as stocks come & go. As market uncertainty sends gold prices rocketing higher, what are the best ways for investors to profit? With the potential for four more years of market tumult, here’s how savvy investors should take advantage of the coming gold rush.

The gold market is both amazingly large and stunningly small, depending on how you look at it. On one hand, there’s a tremendous amount of value packed into the shiny metal. But the reason it packs so much value per ounce is that there’s precious little of it in the world. That scarcity could continue to drive up the value of gold as more people stake their claim in the precious metal.

There’s a difference between the narrative, which is what you’re being told, versus the reality of the economic data. It’s in no one’s interest ahead of the election to say the U.S. economy is a mess. If the flood of bad economic data continues, the Fed will almost certainly print more money or cut interest rates. And that could easily send the price of gold through the roof.

The BIS-network keeps a lid on the dollar gold price. Since 2013 the dollar gold price per ounce gold is lower than the all-in company costs per ounce gold. The question is how long this can go on. Because of the sharp increase in gold mining costs the dollar gold price needed to reach $ 3,000 an ounce in 2017 for the industry to stay profitable and stay in business.

Today, though, interest-bearing assets are, in some cases, not even yielding pennies on the dollar. Bank CDs probably aren’t even yielding 1%, and Treasury yields are still bordering their lowest yields in history. What this means is that the opportunity cost of a sub-1% yield for CDs and money market accounts, or a near-record low yield for T-bonds, makes owning gold and silver more attractive.

With some $200 trillion in projected unfunded liabilities, the government will have to default on some of its promises. A blow up in the futures or other derivative markets could cause a “run on the bank” & the financial system to be thrown into chaos. The U.S. dollar could either crash or surge in a financial panic, depending on how it unfolds. Buy & hold gold outside the banking systems.

Thanks to an overvalued US dollar, gold prices may have nowhere to go but up. The biggest gold producers in the world have seen their share prices double this year. Not only are gold prices soaring, but producers are cutting costs and slimming down debt as they pave the way for gold to return to the top of the favored commodities list. This safe haven is back & the recovery is clear.

In the near term, gold is threatened by a rate hike & there may well be some liquidations of tactical positions. This is to be expected, especially around the start of summer, based on historical precedent. We are optimistic about gold over the rest of this year as negative interest rate fears & also inflation have reawakened investors’ confidence in gold as a reliable currency & store of value.

Yesterday, I explained how the monetary elites are looking to engineer higher gold prices to generate inflation since nothing else has worked. That’s the first answer. Today, I show you the second part of their plan, which may already be underway. The plan now is to have much larger budget deficits. When the government spends & deficit finances it, it will eventually produce inflation.

The billionaires are buying gold. George Soros has just invested in a gold producer, Barrick gold. Soros’ former chief strategist Stan Druckenmiller has stated gold is now his largest currency holding. There is billionaire hedge fund manager Paul Singer who reportedly believes gold is at the beginning of a global rebound. Stagflation is driving positive perceptions of gold.

Why did gold mining shares crash at the end of 2015? Fear. The selling in gold mining stocks was driven by pure emotion — in other words, panic selling. People watched gold prices tumble, panicked and unloaded their shares of mining stocks out of fear rather than due to any logic or reason. The bear market in gold mining stocks took these companies to ridiculous levels.

Gold mining stocks are leveraged to the price of gold. A small jump in gold prices can cause large gold stocks to jump two or three times higher. And smaller, riskier gold mining stocks can skyrocket. It’s not uncommon for the best “junior” miners to soar 10, 20, or 30 times more than physical gold during a gold bull market.

As we have seen with gold producers, a select group of companies can begin to move higher before the worst companies hit “rock bottom.” Companies now stand to outperform or sink lower based on their individual merits. By the time the overall market is in better shape, the most attractive juniors may no longer be cheap.

Gold mining majors and midtiers have cut exploration budgets and now rely on the juniors to provide their replacement reserves and resources. That’s why M&A has increased. This tells me the junior miners are really set for a takeoff. Expect a new record gold price within 18 months. Here are some metal equities poised to take off in 2015.

You’ve probably read that gold’s breakout is resultant of what’s currently happening in Europe, but there’s much more to the story. If the dollar or any other fiat currency were universally acceptable at all times, central banks would see no need to hold any gold. The fact that they do indicates that such currencies are not a universal substitute.

The wave of zero-interest liquidity washing over the financial world could result in a short-term gold bottom of $1,000. I like to invest when there is blood in the streets & that is certainly happening with precious metal equities. Today, investors can buy gold and silver stocks at decade-low valuations & historically low bullion-to-equity valuations.